Spot gold rose slightly on Tuesday as the dollar weakened after euro zone finance ministers delivered on expectations and sealed a deal for a second bailout for debt-laden Greece.
The decision will help Athens resolve its immediate payment needs, but Greece still faces bleak financial and economic outlook in coming years.
“Gold may remain in a consolidation phase in the near term, as it is lacking a catalyst,” said Hou Xinqiang, an analyst at Jinrui Futures in the southern Chinese city of Shenzhen.
“The supportive factors — euro zone debt crisis and expectation on loosening monetary policies around the world have been around for a while and gold needs something new to break the range.”
The rising tensions between Iran and the West, which pushed Brent crude futures above $120 a barrel, could surface as a key driver for gold if the situation deteriorates, he added.
Spot gold inched up 0.1 percent to $1,735.49 an ounce by 0319 GMT. U.S. gold gained 0.7 percent to $1,737.20.
The dollar lost 0.5 percent against a basket of currencies after the Greek bailout deal. A softer dollar makes commodities priced in the greenback cheaper for holders of other currencies.
Technical analysis suggested that spot gold faces resistance at $1,735 an ounce, and a break above this level could send prices towards $1,747, Reuters market analyst Wang Tao said.
Gold has been trapped in the range between $1,700 and $1,750 over the past two weeks, as the talks over Greece’s rescue package inched forward.
“The market has been in the same range for a while and still looks rangebound,” said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong, “The physical market is very quiet and there seems to be less interest from funds.”
Fung said the premiums on gold bars in Hong Kong were steady at $1 to $1.50 an ounce above London prices.
Money managers cut their net long positions in U.S. gold futures and options by about 6 percent in the week of Feb. 14, their first decline in five weeks, said the U.S. Commodity Futures Trading Commission.
Spot platinum edged up 0.3 percent to $1,644.24 an ounce, up 18 percent so far this year, benefitting partly from supply concerns in top producer South Africa.
Impala Platinum, the world’s second-largest platinum producer, has agreed to re-instate all 17,200 workers who were dismissed following an illegal strike, aiming to end a dispute that paralysed the company’s biggest mine, the miners’ union said.
Follow us on
